He is Brazil's favourite faith healer, but did he spirit away £1million?

For years it has been one of Brazil's most cherished urban legends - that the spirit of Dr Adolf Fritz, a field medic who died in the German trenches in 1918, inhabits the body of an ordinary man to treat illnesses which cannot be cured by conventional medicine.

But this week, the legend is looking a little tarnished with the revelation that Dr Fritz - a k a Rubens Faria, a 44-year-old ex-software dealer - is under investigation for murder, tax evasion, charlatanism and money laundering.

Hundreds of thousands of people - reportedly including the Superman actor Christopher Reeve - have visited Mr Faria since 1990 because they believe in the faith healer's 'psychic surgery'.

He treats up to 1,000 people a day in hangar-like premises in Rio de Janeiro and Sao Paulo for a few pounds each, never using anaesthetic or antiseptic, even when performing invasive surgery. Part of the mystique is that his patients famously never feel pain or get infections.

But this week it was alleged that the man seen as a living saint could be one of Brazil's biggest hoaxers.

The police are investigating the claim that at least three people have died at his surgery and that he has built up a fortune of more than £1 million, buying a yacht, a flat in Miami and luxury cars.

According to the legend, Dr Fritz has carried out psychic healing through various Brazilians since a man named Zé Arigo first claimed to channel his spirit in the 1960s.

Mr Faria claims that he was first visited by the spirit of the doctor in 1984, but it was only in 1990, when his daughter Beatriz was born with health problems, that he decided to dedicate his life to being a medium. Dr Fritz allegedly appeared to him and said he would save Beatriz if he could borrow Mr Faria's body.

Mr Faria's current problems stem from the break-up last year of his marriage to Rita Costa, aged 34, who he met four years ago. Their split became acrimonious when Mr Faria began dating a 19-year-old friend of his daughter.

In order to claim money she felt she was owed by her husband, Ms Costa sent a document to the police claiming that Mr Faria had evaded paying his taxes and was practising medicine illegally.

At Mr Faria's Rio surgery, the police discovered that his security guard was carrying an illegal weapon. In custody, the guard claimed that three people had died at the clinic and that he had secretly taken them to a nearby hospital.

When police searched the premises they found 1,000 boxes of conventional medicines, contradicting Dr Fritz's image as a spiritual healer.

It was also alleged by Ms Costa's brother, who worked with the medium, that when Mr Faria injected patients with his 'spiritual' healing liquid he was really injecting it into a bandage in his hand.

Mr Faria has admitted illegally practising medicine, but he said he was only doing to 'help and save' his patients. He denies all other allegations, claiming that Ms Costa looked after all his business affairs and that she is attempting to extort money from him.

'I work on average for 14 hours a day, from Monday to Friday, incorporated with Dr Fritz,' said Mr Faria, who claims a 60 per cent success rate for his treatments.

'I only sleep four or five hours a night. My life revolves around my spiritual work. I never had time to pay attention to my accounts.' But even as the district police chief Marcelo Bertolucci investigates the case he takes the fable seriously.

'In my opinion I think that Dr Fritz does exist, but that Rubens Faria is doing things that he shouldn't,' he said.

Part of the myth of Dr Fritz is that all the previous channelers of his spirit have died violent deaths which they themselves predicted. Mr Faria has said he will be shot dead next year but he may not last even that long. Last week he was admitted to a private hospital suffering stress.

Brazil's latest attempt to ease the stand-off over the state of Minas Gerais's debts to the government looked shaky yesterday after its governor, Itamar Franco, refused to meet federal officials. The government fears that the debt problems may scare away much-needed investors.